Australia’s Rental Crisis: Rising Prices, Record-Low Vacancies, and Frustrated Tenants - Property Inc

Australia’s Rental Crisis: Rising Prices, Record-Low Vacancies, and Frustrated Tenants

As the rental market in Australia continues to tighten, affordable rental properties in Australian capital cities are at a “record low,” according to a recent report by PropTrack. Coupled with the practices of landlords and property managers, this has exacerbated Australia’s rental crisis.

In an article by Cait Kelly, the number of properties listed for under $400 per week has been reported to have halved in the last year, with the sharpest decline in affordability being seen in units. PropTrack senior economist, Eleanor Creagh, warned, “We’ve got a persistent shortage of rentals in the private rental market, and that is giving landlords the scope to continue to lift rents” [1].

With advertised rents continuing to climb, low-income Australians are faced with a significant challenge, having to spend a large proportion of their income on rent. “But with advertised rents continuing to climb and the share of affordable rental listings falling, any households looking for a rental at the moment will find it tough to avoid spending more of their income on rent,” Creagh added [1].

In a parallel report by Maani Truu, landlords and property managers are explored as critical decision-makers in the rental market. Truu quotes Sydney real estate agent Elizabeth Sargood, who stated that educating landlords on market dynamics and countering unrealistic expectations of sudden rent increases is becoming an increasingly significant part of her role [2].

“Ultimately, it is our job to work in the owners’ best interests,” Sargood states, identifying her role as a go-between for landlords and tenants [2]. The issue of rising rents is compounded by landlords’ increasing property costs and interest rates.

Despite this, Truu’s article reveals that not all landlords are increasing rents. Sydney landlord Helena Lister, for example, decided against raising her rent, influenced by her own experiences as a tenant. “It might be my investment, it might be the landlord’s piece of property, but it’s the tenant’s home,” she says [2].

The ongoing challenge for tenants is not only affordability but also maintenance and repair issues. “We’re not allowed to spend the owner’s money,” Sargood explains, adding that their role is to bring the issues to the landlord’s attention [2].

Unfortunately, the market does not seem to be improving anytime soon. As Creagh warns, “We know strong migration, low vacancy rates, and limited new supply probably means that tough conditions for renters are going to continue.” She emphasizes that the sustainable solution to the crisis is an increase in the supply of available rentals [[1]]

References:

Kelly, C. Affordable rental properties in Australian capital cities at ‘record low’. https://www.theguardian.com/australia-news/2023/may/23/affordable-rental-properties-in-australian-capital-cities-at-record-low

Maani, T. Behind the scenes of Australia’s rental crisis: How decisions are made by landlords and property managers about what you pay. https://www.abc.net.au/news/2023-05-23/behind-the-scenes-of-rent-increases/102329918

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